Amazon (NASDAQ:AMZN) Stock Falls 3% on Rare Analyst Downgrade

Amazon (AMZN) shares fell 3% after the e-commerce giant's stock was hit by a rare analyst downgrade.

Wells Fargo (WFC) analyst Ken Gawrelski downgraded Amazon stock to an equivalent Hold rating and lowered his price target on the stock to $183 from $225 previously. CNBC host Jim Cramer called the AMZN stock downgrade “shocking.”

Mr. Gawrelski said he sees no near-term upside or catalysts for Amazon shares and expects the share price to come under pressure next year. The analyst also said he was concerned about a growing threat to Amazon's core e-commerce business from Walmart (WMT), which has been improving its online retail presence.

Lots of headwinds for AMZN stock

In his report, Gawrelski said he sees “multiple headwinds” for Amazon. That also includes heavy spending on the company's fledgling satellite Internet business, known as Project Kuiper, and moderate revenue from its online advertising business. As a result, Wells Fargo expects Amazon's margins to expand slowly in the future.

The AMZN stock downgrade is extremely rare and comes at a time when many other analysts are revising their ratings and price targets for the company's shares. On the same day that Wells Fargo downgraded Amazon, analysts at JMP Securities and Morgan Stanley (MS) reiterated their buy ratings on the stock and raised their price targets.

Amazon shares have gained 19% so far this year and are up 41% in the last 12 months.

Is Amazon stock a buy?

Wells Fargo is in the minority on Amazon. The stock currently has a consensus rating of “Strong Buy” from 45 Wall Street analysts. This is based on 43 Buy and two Hold recommendations made over the past three months. There are no sell ratings for the stock. The average AMZN price target of $223.02 implies a 23% upside from current levels.

Read more analyst reviews on AMZN stock